Bearish Bets: 3 Names With Notable Issues as the Market Hits New Highs
Companies that cannot make their quarter will be severely punished.
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With the stock market making new highs and businesses posting stellar earnings, we should be paying attention to those that miss badly, taking advantage of poor price action to set up for more downside activity.
While we will not weigh in with fundamental analysis on these issues, we will pop the hood for a look at the charts.
Let’s dig in:
Photronics Slips Up Badly, Needs a Reset
The chart of Photronics (PLAB) looked very strong heading into earnings but a misstep caused it to fail badly on May 28. The stock plunged on heavy volume and at best caught the bottom of a trendline, at worst it will fill the gap left from a December 2025 pop. That level is about $26, and should be a good target.
The technicals are not fully bearish but are turning that way, and with the heavy volume day this week to the downside that likely cinches a new bearish trend. MACD is on a double sell signal, money flows are turning bearish while the 200-day MA looms large.
Let’s target the $26 area, and maybe lower. Setting a stop at the $44 level but that may not be relevant starting next week (if confirmed down).
Summertime Not the Time for Burlington Stores
Big coats and heavy jackets don’t usually do well in the hottest months of the year, and Burlington Stores (BURL) sells a ton of these to consumers. The seasonal patterns for sales are widely known so the market makes adjustments, but this last quarter was a very poor result. The stock was punished severely on very heavy volume this week, a sign that big institutions were cutting shares. Makes sense, but the big turnover tells us more selling is likely to come.
MACD is about to turn for a sell signal, money flow is positive but headed down, and the RSI is weak. The stock fell below the key 200 ma this week and tried to recover, but the weight of selling is heavy. We think this has potential to meet the December 2025 interim low at $260 and perhaps lower at $240. Let’s put in a stop just in case at $310.
Everpure Gets Clocked Again After Missing Earnings
It’s not just once when your stock gets hit hard that you should turn away, but a second straight down quarter means you should really get the message. Everpure (P) got hammered again post earnings, this time racking up a massive amount of sellers (see the volume). Of course, investors feel duped for thinking the company would turn things around after a miserable report in February, but that wasn’t the case. The 200 ma fell like a hot knife through butter this week, and dip buyers don’t look to be coming back anytime soon.
MACD is now on a double sell crossover move down, RSI is bending lower at steep angle and money flow is getting bearish. Nothing positive here, but we see potential to move down to the $60 level, let’s target that zone for now, put in a stop at $80 just in case. It’s a really bearish looking chart.
